SINCLAIR BROADCAST GROUP INC, 10-Q filed on 08 Aug 19
v3.19.2
Cover Page - shares
6 Months Ended
Jun. 30, 2019
Aug. 05, 2019
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2019  
Document Transition Report false  
Entity File Number 000-26076  
Entity Registrant Name SINCLAIR BROADCAST GROUP, INC.  
Entity Incorporation, State or Country Code MD  
Entity Tax Identification Number 52-1494660  
Entity Address, Address Line One 10706 Beaver Dam Road  
Entity Address, City or Town Hunt Valley  
Entity Address, State or Province MD  
Entity Address, Postal Zip Code 21030  
City Area Code 410  
Local Phone Number 568-1500  
Title of 12(b) Security Class A Common Stock, par value $ 0.01 per share  
Trading Symbol SBGI  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Amendment Flag false  
Entity Central Index Key 0000912752  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q2  
Class A Common Stock    
Entity Information [Line Items]    
Entity Common Stock, Shares Outstanding   67,063,137
Class B Common Stock    
Entity Information [Line Items]    
Entity Common Stock, Shares Outstanding   25,027,682
v3.19.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 929,038 $ 1,060,330
Accounts receivable, net of allowance for doubtful accounts of $2,060 and $2,379, respectively 589,952 598,597
Current portion of program contract costs 21,854 64,247
Income taxes receivable 8,212 0
Prepaid expenses and other current assets 86,574 60,732
Total current assets 1,635,630 1,783,906
Program contract costs, less current portion 7,524 11,217
Property and equipment, net 699,505 683,134
Operating lease assets 192,390  
Goodwill 2,123,902 2,123,902
Indefinite-lived intangible assets 158,364 158,222
Definite-lived intangible assets, net 1,540,483 1,626,880
Other assets 195,868 184,831
Total assets [1] 6,553,666 6,572,092
Current liabilities:    
Accounts payable and accrued liabilities 424,580 413,227
Income taxes payable 0 23,314
Current portion of notes payable, finance leases and commercial bank financing 25,207 42,564
Current portion of operating lease liabilities 22,662  
Current portion of program contracts payable 53,775 93,480
Total current liabilities 526,224 572,585
Notes payable, finance leases and commercial bank financing, less current portion 3,762,794 3,849,891
Operating lease liabilities, less current portion 194,259  
Program contracts payable, less current portion 40,894 50,060
Deferred tax liabilities 415,579 413,253
Other long-term liabilities 84,917 85,983
Total liabilities [1] 5,024,667 4,971,772
Commitments and contingencies (See Note 5)
Shareholders' Equity:    
Additional paid-in capital 1,024,155 1,121,054
Retained earnings 544,824 517,620
Accumulated other comprehensive loss (784) (784)
Total Sinclair Broadcast Group shareholders’ equity 1,569,115 1,638,836
Noncontrolling interests (40,116) (38,516)
Total equity 1,528,999 1,600,320
Total liabilities and equity 6,553,666 6,572,092
Assets of variable interest entities 121,400 127,600
Liabilities of variable interest entities 15,200 22,300
Class A Common Stock    
Shareholders' Equity:    
Common Stock 670 689
Class B Common Stock    
Shareholders' Equity:    
Common Stock $ 250 $ 257
[1]
Our consolidated total assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities (VIEs) of $121.4 million and $127.6 million, respectively, which can only be used to settle the obligations of the VIEs.  Our consolidated total liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of VIEs of $15.2 million and $22.3 million, respectively, for which the creditors of the VIEs have no recourse to us.  See Note 8. Variable Interest Entities.
v3.19.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Accounts receivable, allowance for doubtful accounts $ 2,060 $ 2,379
Class A Common Stock    
Common Stock, par value (USD per share) $ 0.01 $ 0.01
Common Stock, shares authorized (shares) 500,000,000 500,000,000
Common Stock, shares issued (shares) 67,032,088 68,897,723
Common Stock, shares outstanding (shares) 67,032,088 68,897,723
Class B Common Stock    
Common Stock, par value (USD per share) $ 0.01 $ 0.01
Common Stock, shares authorized (shares) 140,000,000 140,000,000
Common Stock, shares issued (shares) 25,027,682 25,670,684
Common Stock, shares outstanding (shares) 25,027,682 25,670,684
v3.19.2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
REVENUES:        
Revenues $ 770,719 $ 730,143 $ 1,492,822 $ 1,395,496
OPERATING EXPENSES:        
Media production expenses 335,162 300,858 654,206 589,407
Media selling, general and administrative expenses 164,755 150,794 324,678 297,693
Amortization of program contract costs and net realizable value adjustments 22,084 24,710 46,021 51,660
Non-media expenses 39,210 31,021 78,510 52,244
Depreciation of property and equipment 22,305 23,117 45,325 50,442
Corporate general and administrative expenses 51,655 29,685 79,381 54,281
Amortization of definite-lived intangible and other assets 43,537 43,117 87,001 86,722
Gain on asset dispositions and other, net of impairment (13,988) (4,741) (21,897) (25,850)
Total operating expenses 664,720 598,561 1,293,225 1,156,599
Operating income 105,999 131,582 199,597 238,897
OTHER INCOME (EXPENSE):        
Interest expense and amortization of debt discount and deferred financing costs (53,678) (92,271) (108,304) (162,013)
Loss from equity method investments (11,844) (17,690) (25,481) (30,277)
Other income, net 5,533 4,391 7,728 7,772
Total other expense, net (59,989) (105,570) (126,057) (184,518)
Income before income taxes 46,010 26,012 73,540 54,379
INCOME TAX (PROVISION) BENEFIT (2,627) 3,297 (7,386) 18,925
NET INCOME 43,383 29,309 66,154 73,304
Net income attributable to the noncontrolling interests (1,086) (1,268) (2,185) (2,139)
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP $ 42,297 $ 28,041 $ 63,969 $ 71,165
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:        
Basic earnings per share (USD per share) $ 0.46 $ 0.27 $ 0.70 $ 0.70
Diluted earnings per share (USD per share) $ 0.45 $ 0.27 $ 0.69 $ 0.69
Weighted average common shares outstanding (shares) 91,764 102,224 92,032 102,062
Weighted average common and common equivalent shares outstanding (shares) 93,163 102,986 93,189 102,952
Media revenues        
REVENUES:        
Revenues $ 720,898 $ 695,862 $ 1,394,262 $ 1,339,513
Non-media revenues        
REVENUES:        
Revenues $ 49,821 $ 34,281 $ 98,560 $ 55,983
v3.19.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Statement of Comprehensive Income [Abstract]        
Net income $ 43,383 $ 29,309 $ 66,154 $ 73,304
Comprehensive income 43,383 29,309 66,154 73,304
Comprehensive income attributable to the noncontrolling interests (1,086) (1,268) (2,185) (2,139)
Comprehensive income attributable to Sinclair Broadcast Group $ 42,297 $ 28,041 $ 63,969 $ 71,165
v3.19.2
CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Thousands
Total
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Noncontrolling Interests
Class A Common Stock
Class A Common Stock
Common Stock
Class B Common Stock
Class B Common Stock
Common Stock
BALANCE (shares) at Dec. 31, 2017             76,071,145   25,670,684
BALANCE at Dec. 31, 2017 $ 1,534,366 $ 1,320,298 $ 248,845 $ (1,423) $ (34,372)   $ 761   $ 257
Cumulative effect of adoption of new accounting standard at Dec. 31, 2017 2,100   2,100            
Increase (Decrease) in Stockholders' Equity                  
Dividends declared and paid on Class A and Class B Common Stock (36,794)   (36,794)            
Class A Common Stock issued pursuant to employee benefit plans (shares)             505,835    
Class A Common Stock issued pursuant to employee benefit plans 15,958 15,953         $ 5    
Distributions to noncontrolling interests, net (3,516)       (3,516)        
Net income 73,304   71,165   2,139        
BALANCE (shares) at Jun. 30, 2018             76,576,980   25,670,684
BALANCE at Jun. 30, 2018 1,585,418 1,336,251 285,316 (1,423) (35,749)   $ 766   $ 257
BALANCE (shares) at Mar. 31, 2018             76,509,574   25,670,684
BALANCE at Mar. 31, 2018 1,571,543 1,332,432 275,676 (1,423) (36,164)   $ 765   $ 257
Increase (Decrease) in Stockholders' Equity                  
Dividends declared and paid on Class A and Class B Common Stock (18,401)   (18,401)            
Class A Common Stock issued pursuant to employee benefit plans (shares)             67,406    
Class A Common Stock issued pursuant to employee benefit plans 3,820 3,819         $ 1    
Distributions to noncontrolling interests, net (853)       (853)        
Net income 29,309   28,041   1,268        
BALANCE (shares) at Jun. 30, 2018             76,576,980   25,670,684
BALANCE at Jun. 30, 2018 1,585,418 1,336,251 285,316 (1,423) (35,749)   $ 766   $ 257
BALANCE (shares) at Dec. 31, 2018           68,897,723 68,897,723 25,670,684 25,670,684
BALANCE at Dec. 31, 2018 1,600,320 1,121,054 517,620 (784) (38,516)   $ 689   $ 257
Increase (Decrease) in Stockholders' Equity                  
Dividends declared and paid on Class A and Class B Common Stock (36,765)   (36,765)            
Class B Common Stock converted into Class A Common Stock (in shares)             643,002   (643,002)
Class B Common Stock converted into Class A Common Stock 0           $ 7   $ (7)
Repurchases of Class A Common Stock (in shares)             (3,993,194)    
Repurchases of Class A Common Stock (125,034) (124,994)         $ (40)    
Class A Common Stock issued pursuant to employee benefit plans (shares)             1,484,557    
Class A Common Stock issued pursuant to employee benefit plans 28,109 28,095         $ 14    
Distributions to noncontrolling interests, net (3,785)       (3,785)        
Net income 66,154   63,969   2,185        
BALANCE (shares) at Jun. 30, 2019           67,032,088 67,032,088 25,027,682 25,027,682
BALANCE at Jun. 30, 2019 1,528,999 1,024,155 544,824 (784) (40,116)   $ 670   $ 250
BALANCE (shares) at Mar. 31, 2019             66,241,852   25,527,682
BALANCE at Mar. 31, 2019 1,519,153 1,038,332 520,936 (784) (40,248)   $ 662   $ 255
Increase (Decrease) in Stockholders' Equity                  
Dividends declared and paid on Class A and Class B Common Stock (18,409)   (18,409)            
Class B Common Stock converted into Class A Common Stock (in shares)             500,000   (500,000)
Class B Common Stock converted into Class A Common Stock 0           $ 5   $ (5)
Repurchases of Class A Common Stock (in shares)             (500,000)    
Repurchases of Class A Common Stock (20,049) (20,044)         $ (5)    
Class A Common Stock issued pursuant to employee benefit plans (shares)             790,236    
Class A Common Stock issued pursuant to employee benefit plans 5,875 5,867         $ 8    
Distributions to noncontrolling interests, net (954)       (954)        
Net income 43,383   42,297   1,086        
BALANCE (shares) at Jun. 30, 2019           67,032,088 67,032,088 25,027,682 25,027,682
BALANCE at Jun. 30, 2019 $ 1,528,999 $ 1,024,155 $ 544,824 $ (784) $ (40,116)   $ 670   $ 250
v3.19.2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Class A Common Stock        
Dividends declared per share (USD per share) $ 0.2 $ 0.18 $ 0.4 $ 0.36
Dividends paid per share (USD per share) 0.2 0.18 0.4 0.36
Class B Common Stock        
Dividends declared per share (USD per share) 0.2 0.18 0.4 0.36
Dividends paid per share (USD per share) $ 0.2 $ 0.18 $ 0.4 $ 0.36
v3.19.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 66,154 $ 73,304
Adjustments to reconcile net income to net cash flows from operating activities:    
Depreciation of property and equipment 45,325 50,442
Amortization of definite-lived intangible and other assets 87,001 86,722
Amortization of program contract costs and net realizable value adjustments 46,021 51,660
Stock-based compensation 19,636 13,740
Deferred tax provision (benefit) 2,985 (73,171)
Gain on asset dispositions and other, net of impairment (21,795) (25,777)
Loss from equity method investments 25,481 30,052
Change in assets and liabilities, net of acquisitions:    
Decrease (increase) in accounts receivable 5,486 (2,971)
Increase in prepaid expenses and other current assets (25,357) (27,796)
Increase in accounts payable and accrued liabilities 24,189 85,064
Net change in net income taxes payable/receivable (31,526) 47,570
Decrease in program contracts payable (48,807) (63,916)
Other, net 27,898 10,233
Net cash flows from operating activities 222,691 255,156
CASH FLOWS USED IN INVESTING ACTIVITIES:    
Acquisition of property and equipment (61,595) (52,268)
Purchases of investments (43,594) (18,596)
Distributions from investments 3,026 13,505
Spectrum repack reimbursements 22,119 1,542
Other, net (1,405) (56)
Net cash flows used in investing activities (81,449) (55,873)
CASH FLOWS USED IN FINANCING ACTIVITIES:    
Proceeds from notes payable and commercial bank financing 509 2,016
Repayments of notes payable, commercial bank financing and finance leases (108,554) (142,077)
Dividends paid on Class A and Class B Common Stock (36,765) (36,794)
Repurchase of outstanding Class A Common Stock (125,034) 0
Other, net (2,690) (2,144)
Net cash flows used in financing activities (272,534) (178,999)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (131,292) 20,284
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 1,060,330 995,940
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 929,038 $ 1,016,224
v3.19.2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations

Sinclair Broadcast Group, Inc. (the Company) is a diversified television broadcasting company with national reach and a strong focus on providing high-quality content on our local television stations and digital platforms. The content, distributed through our broadcast platform, consists of programming provided by third-party networks and syndicators, local news, and other original programming produced by us. We also distribute our original programming, and owned and operated network affiliates, on other third-party platforms. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

As of June 30, 2019, our broadcast distribution platform is a single reportable segment for accounting purposes. It consists primarily of our broadcast television stations, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (LMAs), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (JSAs) and shared services agreements (SSAs)), to 191 stations in 89 markets. These stations broadcast 604 channels as of June 30, 2019. For the purpose of this report, these 191 stations and 604 channels are referred to as "our" stations and channels.
Principles of Consolidation
 
The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and variable interest entities (VIEs) for which we are the primary beneficiary.  Noncontrolling interest represents a minority owner’s proportionate share of the equity in certain of our consolidated entities.  All intercompany transactions and account balances have been eliminated in consolidation.

We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 8. Variable Interest Entities for more information on our VIEs.

Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees.
Interim Financial Statements
 
The consolidated financial statements for the three and six months ended June 30, 2019 and 2018 are unaudited.  In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of equity, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.
 
As permitted under the applicable rules and regulations of the Securities and Exchange Commission (SEC), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.  The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.
Equity Investments
 
We measure our investments, excluding equity method investments, at fair value or, in situations where fair value is not readily determinable, we have the option to value investments at cost plus observable changes in value less impairment. Investments accounted for utilizing the measurement alternative were $23.0 million, net of $1.6 million of cumulative impairments, as of June 30, 2019 and $24.5 million as of December 31, 2018. For the six months ended June 30, 2019, we recorded a $1.6 million impairment related to one investment accounted for utilizing the measurement alternative, which is reflected in other income, net in our consolidated statements of operations. For the three months ended June 30, 2019 and the three and six months ended June 30, 2018, there were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative.
Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities.  Actual results could differ from those estimates.
Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued new guidance related to accounting for leases, Accounting Standards Codification Topic 842 (ASC 842). We adopted the new guidance on January 1, 2019 using the modified retrospective approach and the optional transition method. Under this adoption method, comparative prior periods were not adjusted and continue to be reported in accordance with our historical accounting policy. We elected to apply the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carryforward our historical assessments of whether contracts are, or contain, leases and lease classification. The primary impact of adopting this standard was the recognition of $215.2 million of operating lease liabilities and $196.1 million of operating lease assets, upon adoption. The adoption did not have a material impact on how we account for finance leases. See Note 4. Leases for more information regarding our leasing arrangements.

In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, with the capitalized implementation costs of a hosting arrangement that is a service contract expensed over the term of the hosting arrangement. The new standard is effective for interim and annual reporting periods beginning after December 15, 2019, applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

In October 2018, the FASB issued guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in GAAP). The new standard is effective for interim and annual reporting periods beginning after December 15, 2019, applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

In March 2019, the FASB issued guidance which requires that an entity test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. The new standard is effective for interim and annual reporting periods beginning after December 15, 2019, applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.
Revenue Recognition

The following table presents our revenue disaggregated by type and segment (in thousands):
 
Three Months Ended
 
June 30, 2019
 
June 30, 2018
 
Broadcast
 
Other
 
Total
 
Broadcast
 
Other
 
Total
Advertising revenue
$
314,520

 
$
24,584

 
$
339,104

 
$
338,204

 
$
20,918

 
$
359,122

Distribution revenue
334,746

 
31,911

 
366,657

 
291,931

 
27,527

 
319,458

Other media and non-media revenues
10,358

 
54,600

 
64,958

 
12,144

 
39,419

 
51,563

Total revenues
$
659,624

 
$
111,095

 
$
770,719

 
$
642,279

 
$
87,864

 
$
730,143

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
Broadcast
 
Other
 
Total
 
Broadcast
 
Other
 
Total
Advertising revenue
$
602,370

 
$
44,786

 
$
647,156

 
$
637,116

 
$
38,334

 
$
675,450

Distribution revenue
654,744

 
64,078

 
718,822

 
579,056

 
54,762

 
633,818

Other media and non-media revenues
21,011

 
105,833

 
126,844

 
22,000

 
64,228

 
86,228

Total revenues
$
1,278,125

 
$
214,697

 
$
1,492,822

 
$
1,238,172

 
$
157,324

 
$
1,395,496



Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions on our broadcast television and digital platforms.

Distribution Revenue. The Company generates distribution revenue through fees received from multi-channel video programming distributors (MVPDs) and virtual MVPDs for the right to distribute our stations and other properties on their respective distribution platforms.

In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage based royalty.

Deferred Revenues. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. Deferred revenues were $67.8 million and $83.3 million as of June 30, 2019 and December 31, 2018, respectively. Deferred revenues recognized during the six months ended June 30, 2019 and 2018 that were included in the deferred revenues balance as of December 31, 2018 and 2017 were $56.0 million and $21.5 million, respectively.
Income Taxes

Our income tax provision for all periods consists of federal and state income taxes.  The tax provision for the three and six months ended June 30, 2019 and 2018 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all deferred tax assets will not be realized.  In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income.  In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis.  A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three and six months ended June 30, 2019 was less than the statutory rate primarily due to $8.3 million and $13.0 million, respectively, of federal tax credits related to investments in sustainability initiatives. Our effective income tax rate for the three months ended June 30, 2018 was less than the statutory rate primarily due to $5.2 million of federal tax credits related to investments in sustainability initiatives and a $4.2 million state benefit related to a change in apportionment estimates on recognition of previously deferred tax gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction. Our effective income tax rate for the six months ended June 30, 2018 was less than the statutory rate primarily due to a $17.7 million permanent tax benefit recognized from an IRS tax ruling on the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction and $6.3 million federal tax credits related to investments in sustainability initiatives.
Share Repurchase Program

On August 9, 2018, the Board of Directors authorized a $1.0 billion share repurchase authorization, in addition to the previous repurchase authorization of $150.0 million. There is no expiration date and currently, management has no plans to terminate this program.  For the three and six months ended June 30, 2019, we repurchased 0.5 million shares of Class A Common Stock for $20.0 million and 4.0 million shares of Class A Common Stock for $125.0 million, respectively. As of June 30, 2019, the total remaining purchase authorization was $743.0 million.
Subsequent Events    
 
In August 2019, our Board of Directors declared a quarterly dividend of $0.20 per share, payable on September 16, 2019 to holders of record at the close of business on August 30, 2019.

In July 2019, we announced that we will redeem, in full, $600.0 million of Sinclair Television Group's (STG) 5.375% Senior Unsecured Notes due 2021 on August 13, 2019. See STG 5.375% Senior Unsecured Notes under Note 3. Notes Payable and Commercial Bank Financing for further discussion.

On August 2, 2019, in connection with the pending acquisition of the RSNs, Diamond Sports Group, LLC (Diamond) and Diamond Sports Finance Company (Diamond Co-Issuer), both indirect wholly-owned subsidiaries of the Company, issued $3.050 billion principal amount of senior secured notes, which bear interest at a rate of 5.375% per annum and mature on August 15, 2026 (the "Diamond 5.375% Secured Notes") and issued $1.825 billion principal amount of senior notes, which bear interest at a rate of 6.625% per annum and mature on August 15, 2027 (the "Diamond 6.625% Notes" and, together with the Diamond 5.375% Secured Notes, the "Diamond Notes"). See RSN Debt Financing under Note 3. Notes Payable and Commercial Bank Financing for further discussion.
Reclassifications
 
Certain reclassifications have been made to prior years' consolidated financial statements to conform to the current year's presentation.
v3.19.2
ACQUISITIONS AND DISPOSITIONS OF ASSETS
6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]  
ACQUISITIONS AND DISPOSITIONS OF ASSETS ACQUISITIONS AND DISPOSITIONS OF ASSETS:

Pending Acquisitions

In May 2019, Diamond entered into a definitive agreement with The Walt Disney Company (Disney) to acquire the equity interests in 14 Regional Sports Networks (21 brands) and Fox College Sports (collectively, the RSNs), which were acquired by Disney in its acquisition of Twenty-First Century Fox, Inc., for a purchase price of $9.6 billion, subject to certain adjustments. Completion of the transaction is subject to customary closing conditions, including the approval of the U.S. Department of Justice (DOJ).

We expect to capitalize Diamond with (i) $1.4 billion in cash equity, comprised of a combination of approximately $0.7 billion of cash on hand and a contribution of $0.7 billion from a new term loan facility at Sinclair Television Group, Inc (STG), (ii) proceeds from a $1.0 billion fully committed privately-placed preferred equity offering by a newly-formed indirect wholly-owned subsidiary of the Company, (iii) a $3.3 billion Term Loan facility at Diamond, and (iv) proceeds from $4.9 billion in notes issued by Diamond. See RSN Debt Financing within Note 3. Notes Payable and Commercial Bank Financing for more information. The transaction will be treated as an asset acquisition for tax purposes, with the Company receiving a full step-up in basis.

Termination of Material Definitive Agreement

In August 2018, we received a termination notice from Tribune Media Company (Tribune), terminating the Agreement and Plan of Merger entered into on May 8, 2017, between the Company and Tribune (Merger Agreement), which provided for the acquisition by the Company of the outstanding shares of Tribune Class A common stock and Tribune Class B common stock (Merger). See Litigation under Note 5. Commitments and Contingencies for further discussion on our pending litigation related to the Tribune acquisition. For the three months ended June 30, 2018, we recognized $44.5 million of costs in connection with this acquisition, which included $5.2 million primarily related to legal and other professional services, that we expensed as incurred and classified as corporate general and administrative expenses on our consolidated statements of operations; and $39.3 million related to financing ticking fees, which was recorded as interest expense on our consolidated statements of operations. For the six months ended June 30, 2018, we recognized $66.2 million of costs in connection with this acquisition, which included $9.9 million primarily related to legal and other professional services, that we expensed as incurred and classified as corporate general and administrative expenses on our consolidated statements of operations; and $56.3 million related to financing ticking fees, which was recorded as interest expense on our consolidated statements of operations.

Dispositions

Broadcast Incentive Auction. Congress authorized the FCC to conduct so-called "incentive auctions" to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of its rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process.

For the six months ended June 30, 2018, we recognized a gain of $83.3 million which is included within gain on asset dispositions and other, net of impairment on our consolidated statements of operations. This gain relates to the auction proceeds associated with one market where the underlying spectrum was vacated during the first quarter of 2018. The results of the auction are not expected to produce any material change in operations of the Company as there is no change in on air operations.

In the repacking process associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that 100 of our stations have been assigned to new channels. Legislation has provided the FCC with a $2.75 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. We recorded gains related to reimbursements for spectrum repack costs incurred of $14.1 million and $22.1 million for the three and six months ended June 30, 2019, respectively, and $0.7 million and $1.5 million for the three and six months ended June 30, 2018, respectively, which are recorded within gain on asset dispositions and other, net of impairment on our consolidated financial statements. For the three and six months ended June 30, 2019, capital expenditures related to the spectrum repack were $12.0 million and $24.8 million, respectively, and $8.3 million and $11.7 million for the three and six months ended June 30, 2018, respectively.
v3.19.2
NOTES PAYABLE AND COMMERCIAL BANK FINANCING
6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
NOTES PAYABLE AND COMMERCIAL BANK FINANCING NOTES PAYABLE AND COMMERCIAL BANK FINANCING:

Notes payable and finance leases to affiliates

The current portion of notes payable, finance leases, and commercial bank financing on our consolidated balance sheets includes finance leases to affiliates of $2.1 million and $1.9 million as of June 30, 2019 and December 31, 2018, respectively. Notes payable, finance leases, and commercial bank financing, less current portion, on our consolidated balance sheets includes long-term finance leases to affiliates of $9.6 million and $10.6 million as of June 30, 2019 and December 31, 2018, respectively.

Debt of variable interest entities and guarantees of third-party debt

We jointly, severally, unconditionally, and irrevocably guarantee $72.7 million and $76.5 million of debt of certain third parties as of June 30, 2019 and December 31, 2018, respectively, of which $22.3 million and $24.4 million, net of deferred financing costs, related to consolidated VIEs is included on our consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 9. Related Person Transactions. We have determined that, as of June 30, 2019, it is not probable that we would have to perform under any of these guarantees.

STG Term Loan A

On April 30, 2019, we paid in full the remaining principal balance of $91.5 million of Term Loan A-2 debt under the Bank Credit Agreement, due July 31, 2021.

STG 5.375% Senior Unsecured Notes

In July 2019, the Company announced that it will redeem, in full, $600.0 million of STG's 5.375% Senior Unsecured Notes due 2021 (the 5.375% Notes) on August 13, 2019. The 5.375% Notes were called at 100.000% of their par value. The redemption will be funded through a combination of seven-year incremental term B loans (Incremental Term B Loans) and cash on hand and is contingent upon the funding of $600.0 million of Incremental Term B Loans to finance such redemption.

RSN Debt Financing

On August 2, 2019, Diamond and Diamond Co-Issuer issued the Diamond Notes as described under Subsequent Events within Note 1. Nature of Operations and Summary of Significant Accounting Policies. The proceeds of the Diamond Notes are held in escrow and will be used to finance the acquisition of the RSNs as discussed under Pending Acquisitions within Note 2. Acquisitions and Dispositions of Assets. If (1) we do not consummate the acquisition of the RSNs on or prior to February 3, 2020; (2) prior to February 3, 2020, we notify the escrow agent that they will not pursue the consummation of the acquisition of the RSNs; or (3) the applicable conditions to the release of the escrow funds (including the completion of the acquisition of the RSNs) are not satisfied on or prior to February 3, 2020, then, in any such case, we must redeem all of the Diamond Notes at a redemption price equal to 100.0% of the principal amount of the Diamond Notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Prior to August 15, 2022, we may redeem the Diamond Notes, in whole or in part, at any time or from time to time, at a price equal to 100% of the principal amount of the applicable Diamond Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a ‘‘make-whole’’ premium. Beginning on August 15, 2022, we may redeem the Diamond Notes, in whole or in part, at any time or from time to time at certain redemption prices, plus accrued and unpaid interest, if any, to the date of redemption. In addition, on or prior to August 15, 2022, we may redeem up to 40% of each series of the Diamond Notes using the proceeds of certain equity offerings. If the notes are redeemed during the twelve-month period beginning August 15, 2022, 2023, and 2024 and thereafter, then the redemption prices for the Diamond 5.375% Secured Notes are 102.688%, 101.344%, and 100%, respectively, and the redemption prices for the Diamond 6.625% Notes are 103.313%, 101.656%, and 100%, respectively.

Diamond’s and Diamond Co-Issuer's obligations under the Diamond Notes are jointly and severally guaranteed by Diamond Sports Intermediate Holdings LLC (Holdings), Diamond’s and Diamond Co-Issuer’s direct parent, and certain wholly-owned subsidiaries of Holdings. Upon completion of the acquisition of the RSNs, the RSNs wholly-owned by Holdings and its subsidiaries will also jointly and severally guarantee the Issuers' obligations under the Diamond Notes. However, the Diamond Notes are not guaranteed by the Company, STG, or any of STG’s subsidiaries.

In conjunction with the acquisition of the RSNs, we expect to (1) borrow $0.7 billion of seven-year term loans, priced at LIBOR plus 2.50%, under STG's bank credit agreement which will be amended and restated, (2) issue $1.0 billion fully committed privately-placed preferred equity of a newly-formed indirect wholly-owned subsidiary of the Company, and (3) borrow $3.3 billion of seven-year term loans, priced at LIBOR plus 3.25%, under a new bank credit agreement to be established by Diamond and Diamond Co-Issuer, as discussed under Pending Acquisitions within Note 2. Acquisitions and Dispositions of Assets at or near the time of closing on the acquisition of the RSNs. Also, concurrent with the financing of the acquisition of the RSNs, we expect to replace STG's existing revolving credit facility with a new $0.65 billion five-year revolving credit facility, priced at LIBOR plus 2.00%, and establish a new $0.65 billion five-year revolving credit facility, priced at LIBOR plus 3.00%, for Diamond. The newly committed debt at STG will be guaranteed by the Company, certain other subsidiaries of the Company, and certain subsidiaries of STG, and secured by certain assets of STG and the guarantors, consistent with existing terms loans under the existing bank credit facility. In connection with the preferred equity, the Company will provide a guarantee of collection of distributions from Diamond and Diamond Co-Issuer.
v3.19.2
LEASES
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
LEASES LEASES:

As described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, we adopted new lease accounting guidance effective January 1, 2019.
 
We determine if a contractual arrangement is a lease at inception. Our lease arrangements provide the Company the right to utilize certain specified tangible assets for a period of time in exchange for consideration. Our leases primarily relate to building space, tower space, and equipment. We do not separate non-lease components from our building and tower leases for the purposes of measuring our lease liabilities and assets. Our leases consist of operating leases and finance leases which are presented separately within our consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

We recognize a lease liability and a right of use asset at the lease commencement date based on the present value of the future lease payments over the lease term discounted using our incremental borrowing rate. Implicit interest rates within our lease arrangements are rarely determinable. Right of use assets also include, if applicable, prepaid lease payments and initial direct costs, less incentives received.

We recognize operating lease expense on a straight-line basis over the term of the lease within operating expenses. Expense associated with our finance leases consists of two components, including interest on our outstanding finance lease obligations and amortization of the related right of use assets. The interest component is recorded in interest expense and amortization of the finance lease asset is recognized on a straight-line basis over the term of the lease in depreciation of property and equipment.

Our leases do not contain any material residual value guarantees or material restrictive covenants. Some of our leases include optional renewal periods or termination provisions which we assess at inception to determine the term of the lease, subject to reassessment in certain circumstances.

The following table presents lease expense we have recorded within our consolidated statements of operations for the three and six months ended June 30, 2019 (in thousands):
 
Three Months Ended June 30, 2019
 
Six Months Ended June 30, 2019
Finance lease expense:
 
 
 
Amortization of finance lease asset
$
775

 
$
1,494

Interest on lease liabilities
1,063

 
1,977

Total finance lease expense
1,838

 
3,471

Operating lease expense (a)
10,217

 
20,155

Total lease expense
$
12,055

 
$
23,626

 
(a)
Includes variable and short-term lease expense of $1.2 million and $0.2 million, respectively, for the three months ended June 30, 2019 and $2.3 million and $0.5 million, respectively, for the six months ended June 30, 2019.

The following table summarizes our outstanding operating and finance lease obligations as of June 30, 2019 (in thousands):
 
Operating Leases
 
Finance Leases
 
Total
2019
$
16,975

 
$
4,042

 
$
21,017

2020
31,711

 
7,938

 
39,649

2021
29,688

 
7,908

 
37,596

2022
27,174

 
7,166

 
34,340

2023
25,786

 
7,138

 
32,924

Thereafter
168,856

 
21,217

 
190,073

Total undiscounted obligations
300,190

 
55,409

 
355,599

Less imputed interest
(83,269
)
 
(15,393
)
 
(98,662
)
Present value of lease obligations
$
216,921

 
$
40,016

 
$
256,937



Future minimum payments under operating leases as of December 31, 2018 were as follows (in thousands):
2019
$
32,108

2020
31,287

2021
29,547

2022
26,702

2023
24,325

2024 and thereafter
157,816

Total
$
301,785



The following table summarizes supplemental balance sheet information related to leases as of June 30, 2019 (in thousands, except lease term and discount rate):
 
Operating Leases
 
Finance Leases
 
Lease assets, non-current
$
192,390

 
$
16,130

(a)
 
 
 
 
 
Lease liabilities, current
$
22,662

 
$
4,605

 
Lease liabilities, non-current
194,259

 
35,411

 
Total lease liabilities
$
216,921

 
$
40,016

 
 
 
 
 
 
Weighted average remaining lease term (in years)
10.94

 
7.55

 
Weighted average discount rate
5.8
%
 
9.0
%
 
 
(a)
Finance lease assets are reflected in property and equipment, net.

The following table presents other information related to leases for the six months ended June 30, 2019 (in thousands):
 
Six Months Ended 
 June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from operating leases
$
15,379

Operating cash flows from finance leases
1,965

Financing cash flows from finance leases
2,228

Leased assets obtained in exchange for new lease liabilities
9,969


LEASES LEASES:

As described in Note 1. Nature of Operations and Summary of Significant Accounting Policies, we adopted new lease accounting guidance effective January 1, 2019.
 
We determine if a contractual arrangement is a lease at inception. Our lease arrangements provide the Company the right to utilize certain specified tangible assets for a period of time in exchange for consideration. Our leases primarily relate to building space, tower space, and equipment. We do not separate non-lease components from our building and tower leases for the purposes of measuring our lease liabilities and assets. Our leases consist of operating leases and finance leases which are presented separately within our consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

We recognize a lease liability and a right of use asset at the lease commencement date based on the present value of the future lease payments over the lease term discounted using our incremental borrowing rate. Implicit interest rates within our lease arrangements are rarely determinable. Right of use assets also include, if applicable, prepaid lease payments and initial direct costs, less incentives received.

We recognize operating lease expense on a straight-line basis over the term of the lease within operating expenses. Expense associated with our finance leases consists of two components, including interest on our outstanding finance lease obligations and amortization of the related right of use assets. The interest component is recorded in interest expense and amortization of the finance lease asset is recognized on a straight-line basis over the term of the lease in depreciation of property and equipment.

Our leases do not contain any material residual value guarantees or material restrictive covenants. Some of our leases include optional renewal periods or termination provisions which we assess at inception to determine the term of the lease, subject to reassessment in certain circumstances.

The following table presents lease expense we have recorded within our consolidated statements of operations for the three and six months ended June 30, 2019 (in thousands):
 
Three Months Ended June 30, 2019
 
Six Months Ended June 30, 2019
Finance lease expense:
 
 
 
Amortization of finance lease asset
$
775

 
$
1,494

Interest on lease liabilities
1,063

 
1,977

Total finance lease expense
1,838

 
3,471

Operating lease expense (a)
10,217

 
20,155

Total lease expense
$
12,055

 
$
23,626

 
(a)
Includes variable and short-term lease expense of $1.2 million and $0.2 million, respectively, for the three months ended June 30, 2019 and $2.3 million and $0.5 million, respectively, for the six months ended June 30, 2019.

The following table summarizes our outstanding operating and finance lease obligations as of June 30, 2019 (in thousands):
 
Operating Leases
 
Finance Leases
 
Total
2019
$
16,975

 
$
4,042

 
$
21,017

2020
31,711

 
7,938

 
39,649

2021
29,688

 
7,908

 
37,596

2022
27,174

 
7,166

 
34,340

2023
25,786

 
7,138

 
32,924

Thereafter
168,856

 
21,217

 
190,073

Total undiscounted obligations
300,190

 
55,409

 
355,599

Less imputed interest
(83,269
)
 
(15,393
)
 
(98,662
)
Present value of lease obligations
$
216,921

 
$
40,016

 
$
256,937



Future minimum payments under operating leases as of December 31, 2018 were as follows (in thousands):
2019
$
32,108

2020
31,287

2021
29,547

2022
26,702

2023
24,325

2024 and thereafter
157,816

Total
$
301,785



The following table summarizes supplemental balance sheet information related to leases as of June 30, 2019 (in thousands, except lease term and discount rate):
 
Operating Leases
 
Finance Leases
 
Lease assets, non-current
$
192,390

 
$
16,130

(a)
 
 
 
 
 
Lease liabilities, current
$
22,662

 
$
4,605

 
Lease liabilities, non-current
194,259

 
35,411

 
Total lease liabilities
$
216,921

 
$
40,016

 
 
 
 
 
 
Weighted average remaining lease term (in years)
10.94

 
7.55

 
Weighted average discount rate
5.8
%
 
9.0
%
 
 
(a)
Finance lease assets are reflected in property and equipment, net.

The following table presents other information related to leases for the six months ended June 30, 2019 (in thousands):
 
Six Months Ended 
 June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from operating leases
$
15,379

Operating cash flows from finance leases
1,965

Financing cash flows from finance leases
2,228

Leased assets obtained in exchange for new lease liabilities
9,969


v3.19.2
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES:

Litigation
 
We are a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. Except as noted below, we do not believe the outcome of these matters, individually or in the aggregate, will have a material effect on the Company's financial statements. 

On December 21, 2017, the FCC issued a Notice of Apparent Liability for Forfeiture proposing a $13.4 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries. Based on a review of the current facts and circumstances, management has provided for what is believed to be a reasonable estimate of the loss exposure for this matter. We have responded to dispute the Commission's findings and the proposed fine; however, we cannot predict the outcome of any potential FCC action related to this matter. We do not believe that the ultimate outcome of this matter will have a material effect on the Company's financial statements.

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice (DOJ).  This consent decree resolves the Department of Justice’s investigation into the sharing of pacing information among certain stations in some local markets.  The DOJ filed the consent decree and related documents in the U.S. District Court for the District of Columbia on November 13, 2018.  The U.S District Court for the District of Columbia entered the consent decree on May 22, 2019. The consent decree is not an admission of any wrongdoing by the Company and does not subject Sinclair to any monetary damages or penalties.  The Company believes that even if the pacing information was shared as alleged, it would not have impacted any pricing of advertisements or the competitive nature of the market. The consent decree requires the Company to adopt certain antitrust compliance measures, including the appointment of an Antitrust Compliance Officer, consistent with what the Department of Justice has required in previous consent decrees in other industries. The consent decree also requires the Company stations not to exchange pacing and certain other information with other stations in their local markets, which the Company’s management has already instructed them not to do.

The Company is aware of twenty-two putative class action lawsuits that were filed against the Company following published reports of the DOJ investigation into the exchange of pacing data within the industry. On October 3, 2018, these lawsuits were consolidated in the Northern District of Illinois. The consolidated action alleges that the Company and eight other broadcasters conspired to fix prices for commercials to be aired on broadcast television stations throughout the United States and engaged in unlawful information sharing, in violation of the Sherman Antitrust Act. The consolidated action seeks damages, attorneys’ fees, costs and interest, as well as injunctions against adopting practices or plans that would restrain competition in the ways the plaintiffs have alleged. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On July 19, 2018, the FCC released a Hearing Designation Order (HDO) to commence a hearing before an Administrative Law Judge (ALJ) with respect to the Company’s proposed acquisition of Tribune.  The HDO directed the FCC's Media Bureau to hold in abeyance all other pending applications and amendments thereto related to the proposed Merger with Tribune until the issues that are the subject of the HDO have been resolved with finality.  The HDO asked the ALJ to determine (i) whether Sinclair was the real party in interest to the sale of WGN-TV, KDAF(TV), and KIAH(TV), (ii) if so, whether the Company engaged in misrepresentation and/or lack of candor in its applications with the FCC and (iii) whether consummation of the overall transaction would be in the public interest and compliance with the FCC’s ownership rules.  The Company maintains that the overall transaction and the proposed divestitures complied with the FCC’s rules, and strongly rejects any allegation of misrepresentation or lack of candor. The Merger Agreement was terminated by Tribune on August 9, 2018, on which date the Company subsequently filed a letter with the FCC to withdraw the merger applications and have them dismissed with prejudice and filed with the ALJ a Notice of Withdrawal of Applications and Motion to Terminate Hearing (Motion). On August 10, 2018, the FCC's Enforcement Bureau filed a responsive pleading with the ALJ stating that it did not oppose dismissal of the merger applications and concurrent termination of the hearing proceeding. The ALJ granted the Motion and terminated the hearing on March 5, 2019. As part of a discussion initiated by the Company to respond to allegations raised in the HDO, the FCC’s Media Bureau sent the Company a confidential letter of inquiry, which was inadvertently posted to the FCC’s online docket and removed by FCC staff shortly thereafter. The FCC subsequently released a statement that said the Media Bureau is in the process of resolving an outstanding issue regarding Sinclair’s conduct as part of the last year's FCC’s review of its proposed merger with Tribune and that the Bureau believes that delaying consideration of this matter would not be in anyone's interest. We cannot predict the outcome of the FCC's inquiry or whether or how the issues raised in the now-terminated HDO might impact the Company's ability to acquire additional TV stations in the future.

On August 9, 2018, Tribune filed a complaint (the "Tribune Complaint") in the Court of Chancery of the State of Delaware against the Company, which action is captioned Tribune Media Company v. Sinclair Broadcast Group, Inc, Case No. 2018-0593-JTL. The Tribune Complaint alleges that the Company breached the Merger Agreement by, among other things, failing to use its reasonable best efforts to secure regulatory approval of the Merger, and that such breach resulted in the failure of the Merger to obtain regulatory approval and close. The Tribune Complaint seeks declaratory relief, money damages in an amount to be determined at trial (but which the Tribune Complaint suggests could be in excess of $1 billion), and attorney's fees and costs. On August 29, 2018, the Company filed its Answer, Affirmative Defenses, and Verified Counterclaim to the Verified Complaint. In its counterclaim, the Company alleges that Tribune breached the Merger Agreement and seeks declaratory relief, money damages in an amount to be determined at trial, and attorneys' fees and costs. While no finding of liability or damages against the Company has been made, an immaterial reserve during the second quarter of 2019 was recorded and the Company intends to continue its vigorous defense of this matter, while exploring opportunities to resolve it on reasonable terms. There can be no assurance that the amount of the loss ultimately incurred in this matter will not be greater than the amount recorded at this time. 

On August 9, 2018, Edward Komito, a putative Company shareholder, filed a class action complaint (the "Initial Complaint") in the United States District Court for the District of Maryland (the "District of Maryland") against the Company, Christopher Ripley and Lucy Rutishauser, which action is now captioned In re Sinclair Broadcast Group, Inc. Securities Litigation, case No. 1:18-CV-02445-CCB (the "Securities Action").  On March 1, 2019, lead counsel in the Securities Action filed an amended complaint, adding David Smith and Steven Marks as defendants, and alleging that defendants violated the federal securities laws by issuing false or misleading disclosures concerning (a) the Merger prior to the termination thereof; and (b) the DOJ investigation concerning the alleged exchange of pacing information.  The Securities Action seeks declaratory relief, money damages in an amount to be determined at trial, and attorney’s fees and costs. On May 3, 2019, Defendants filed a motion to dismiss the amended complaint, which motion has been opposed by lead plaintiff. The Company believes that the allegations in the Securities Action are without merit and intends to vigorously defend against the allegations.

In addition, beginning in late July 2018, Sinclair received letters from two putative Company shareholders requesting that the Board of Directors of the Company investigate whether any of the Company’s officers and directors committed nonexculpated breaches of fiduciary duties in connection with, or gross mismanagement with respect to: (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. A committee consisting of independent members of the board of directors has been formed to respond to these demands (the "Special Litigation Committee"). The members of the Special Litigation Committee are Martin R. Leader, Larry E. McCanna, and the Honorable Benson Everett Legg, with Martin Leader as its designated Chair.

On November 29, 2018, putative Company shareholder Fire and Police Retiree Health Care Fund, San Antonio filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Fire and Police Retiree Health Care Fund, San Antonio v. Smith, et al., Case No. 1:18-cv-03670-RDB (the "San Antonio Action"). On December 26, 2018, putative Company shareholder Teamsters Local 677 Health Services & Insurance Plan filed a shareholder derivative complaint in the Circuit Court of Maryland for Baltimore County (the "Circuit Court") against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Teamsters Local 677 Health Services & Insurance Plan v. Friedman, et al., Case No. 03-C-18-12119 (the "Teamsters Action"). A defendant in the Teamsters Action removed the Teamsters action to the District of Maryland, and the plaintiff in that case has moved to remand the case back to the Circuit Court. That motion is fully briefed and awaiting decision. On December 21, 2018, putative Company shareholder Norfolk County Retirement System filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Norfolk County Retirement System v. Smith, et al., Case No. 1:18-cv-03952-RDB (the "Norfolk Action," and together with the San Antonio Action and the Teamsters Action, the "Derivative Actions"). The plaintiffs in each of the Derivative Actions allege breaches of fiduciary duties by the defendants in connection with (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. The plaintiffs in the Derivative Actions seek declaratory relief, money damages to be awarded to the Company in an amount to be determined at trial, corporate governance reforms, equitable or injunctive relief, and attorney’s fees and costs. Additionally, the plaintiffs in the Teamsters and Norfolk Actions allege that the defendants were unjustly enriched, in the form of their compensation as directors and/or officers of the Company, in light of the alleged breaches of fiduciary duty, and seek restitution to be awarded to the Company. These allegations are the subject matter of the review being conducted by the Special Litigation Committee, as noted above. On April 30, 2019, the Special Litigation Committee moved to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions. The Company and the remaining individual defendants joined in this motion.
v3.19.2
EARNINGS PER SHARE
6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE:
 
The following table reconciles income (numerator) and shares (denominator) used in our computations of basic and diluted earnings per share for the periods presented (in thousands):

 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Income (Numerator)
 
 
 
 
 
 
 
Net income
$
43,383

 
$
29,309

 
$
66,154

 
$
73,304

Net income attributable to noncontrolling interests
(1,086
)
 
(1,268
)
 
(2,185
)
 
(2,139
)
Numerator for basic and diluted earnings per common share available to common shareholders
$
42,297

 
$
28,041

 
$
63,969

 
$
71,165

 
 
 
 
 
 
 
 
Shares (Denominator)
 

 
 

 
 
 
 
Weighted-average common shares outstanding
91,764

 
102,224

 
92,032

 
102,062

Dilutive effect of stock-settled appreciation rights and outstanding stock options
1,399

 
762

 
1,157

 
890

Weighted-average common and common equivalent shares outstanding
93,163

 
102,986

 
93,189

 
102,952



The following table shows the weighted-average stock-settled appreciation rights and outstanding stock options (in thousands) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive:

 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018
 
2019
 
2018
Weighted-average stock-settled appreciation rights and outstanding stock options excluded

 
1,600

 
475

 
1,050


v3.19.2
SEGMENT DATA
6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
SEGMENT DATA SEGMENT DATA:
 
We measure segment performance based on operating income (loss). Our broadcast segment includes stations in 89 markets located throughout the continental United States. Other primarily consists of original networks and content, non-broadcast digital and internet solutions, technical services, and other non-media investments. All of our businesses are located within the United States.  Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location.  Other and Corporate are not reportable segments but are included for reconciliation purposes. 

We had $3.4 million and $3.8 million in intercompany interest expense related to intercompany loans between the broadcast segment, other, and corporate for the three months ended June 30, 2019 and 2018, respectively. We had $7.1 million and $7.6 million in intercompany interest expense related to intercompany loans between the broadcast segment, other, and corporate for the six months ended June 30, 2019 and 2018, respectively.
 
Segment financial information is included in the following tables for the periods presented (in thousands):
As of June 30, 2019
 
Broadcast
 
Other
 
Corporate
 
Consolidated
Assets
 
$
4,828,998

 
$
726,311

 
$
998,357

 
$
6,553,666

For the three months ended June 30, 2019
 
Broadcast
 
Other
 
Corporate
 
Consolidated
Revenue
 
$
659,624

 
$
111,095

 
$

 
$
770,719

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
 
59,504

 
6,319

 
19

 
65,842

Amortization of program contract costs and net realizable value adjustments
 
22,084

 

 

 
22,084

Corporate general and administrative expenses
 
32,569

 
263

 
18,823

 
51,655

(Gain) loss on asset dispositions and other, net of impairment
 
(14,122
)
 
134

 

 
(13,988
)
Operating income (loss)
 
134,918

 
(10,077
)
 
(18,842
)
 
105,999

Interest expense
 
1,300

 
195

 
52,183

 
53,678

(Loss) income from equity method investments
 

 
(11,929
)
 
85

 
(11,844
)
For the three months ended June 30, 2018
 
Broadcast
 
Other
 
Corporate
 
Consolidated
Revenue
 
$
642,279

 
$
87,864

 
$

 
$
730,143

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
 
58,964

 
7,251

 
19

 
66,234

Amortization of program contract costs and net realizable value adjustments
 
24,710

 

 

 
24,710

Corporate general and administrative expenses
 
26,590

 
221

 
2,874

 
29,685

Gain on asset dispositions and other, net of impairment
 
(1,301
)
 
(3,440
)


 
(4,741
)
Operating income (loss)
 
140,607

 
(6,132
)
 
(2,893
)
 
131,582

Interest expense
 
1,438

 
198

 
90,635

 
92,271

Loss from equity method investments
 

 
(17,256
)
 
(434
)
 
(17,690
)
For the six months ended June 30, 2019
 
Broadcast
 
Other
 
Corporate
 
Consolidated
Revenue
 
$
1,278,125

 
$
214,697

 
$

 
$
1,492,822

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
 
122,185

 
10,103

 
38

 
132,326

Amortization of program contract costs and net realizable value adjustments
 
46,021

 

 

 
46,021

Corporate general and administrative expenses
 
58,329

 
420

 
20,632

 
79,381

(Gain) loss on asset dispositions and other, net of impairment
 
(22,142
)
 
347

 
(102
)
 
(21,897
)
Operating income (loss)
 
230,145

 
(9,980
)
 
(20,568
)
 
199,597

Interest expense
 
2,783

 
387

 
105,134

 
108,304

(Loss) income from equity method investments
 

 
(25,881
)
 
400

 
(25,481
)
For the six months ended June 30, 2018
 
Broadcast
 
Other
 
Corporate
 
Consolidated
Revenue
 
$
1,238,172

 
$
157,324

 
$

 
$
1,395,496

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
 
122,833

 
14,293

 
38

 
137,164

Amortization of program contract costs and net realizable value adjustments
 
51,660

 

 

 
51,660

Corporate general and administrative expenses
 
48,334

 
476

 
5,471

 
54,281

(Gain) loss on asset dispositions and other, net of impairment
 
(85,400
)
(b)
59,550

(a)

 
(25,850
)
Operating income (loss)
 
316,774

(b)
(72,368
)
(a)
(5,509
)
 
238,897

Interest expense
 
2,809

 
400

 
158,804

 
162,013

(Loss) income from equity method investments
 

 
(31,617
)
 
1,340

 
(30,277
)
 

(a)
Includes a $59.6 million impairment to the carrying value of a consolidated real estate venture.
(b)
Includes a gain of $83.3 million related to the auction proceeds. See Note 2. Acquisitions and Dispositions of Assets.
v3.19.2
VARIABLE INTEREST ENTITIES
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
VARIABLE INTEREST ENTITIES VARIABLE INTEREST ENTITIES: 

Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational, and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational, and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation. Several of these VIEs are owned by a related party, Cunningham. 

In February 2019, we entered into a joint venture with an affiliate of the Chicago Cubs to establish and operate Marquee Sports Network (Marquee). Marquee simultaneously entered into a long term telecast rights agreement with the Chicago Cubs, providing Marquee with the rights to air certain live game telecasts and other content, which we guarantee. Pursuant to a management services agreement, we are responsible for several key functions of Marquee, which most notably includes affiliate and advertising sales services. We have determined that we will consolidate Marquee because it is a variable interest entity and we are the primary beneficiary.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in thousands):
 
 
As of June 30,
2019
 
As of December 31,
2018
ASSETS
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
10,000

 
$

Accounts receivable, net
17,255

 
28,276

Other current assets
2,738

 
6,773

Total current assets
29,993

 
35,049

 
 
 
 
Program contract costs, less current portion
1,393

 
2,058

Property and equipment, net
8,407

 
5,346

Goodwill and indefinite-lived intangible assets
15,064

 
15,064

Definite-lived intangible assets, net
64,217

 
67,680

Other assets
2,362

 
2,374

Total assets
$
121,436

 
$
127,571

 
 
 
 
LIABILITIES
 

 
 

Current liabilities:
 

 
 

Other current liabilities
$
12,895

 
$
18,298

 
 
 
 
Notes payable, finance leases and commercial bank financing, less current portion
17,085

 
19,278

Program contracts payable, less current portion
6,917

 
8,474

Other long-term liabilities
650

 
650

Total liabilities
$
37,547

 
$
46,700


 
The amounts above represent the consolidated assets and liabilities of the VIEs described above, for which we are the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $125.9 million and $124.5 million as of June 30, 2019 and December 31, 2018, respectively, as these amounts are eliminated in consolidation.  The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of June 30, 2019, all of the liabilities are non-recourse to us except for the debt of certain VIEs. See Debt of variable interest entities and guarantees of third-party debt under Note 3. Notes Payable and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs 

We have several investments in entities which are considered VIEs. However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.
 
The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $72.7 million and $71.3 million as of June 30, 2019 and December 31, 2018, respectively. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to equity method investments and other investments are recorded in (loss) income from equity method investments and other income, net, respectively, on our consolidated statements of operations. We recorded losses of $11.5 million and $24.6 million for the three and six months ended June 30, 2019, respectively, and losses of $14.5 million and $23.5 million for the three and six months ended June 30, 2018, respectively.
v3.19.2
RELATED PERSON TRANSACTIONS
6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]  
RELATED PERSON TRANSACTIONS RELATED PERSON TRANSACTIONS:
 
Transactions with our controlling shareholders
 
David, Frederick, J. Duncan, and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of our Class B Common Stock and some of our Class A Common Stock. We engaged in the following transactions with them and/or entities in which they have substantial interests:
 
Leases.  Certain assets used by us and our operating subsidiaries are leased from entities owned by the controlling shareholders.  Lease payments made to these entities were $1.3 million for both the three months ended June 30, 2019 and 2018 and $2.2 million and $2.7 million for the six months ended June 30, 2019 and 2018, respectively.
 
Charter Aircraft.  We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of $0.5 million and $0.4 million for the three months ended June 30, 2019 and 2018, respectively, and $1.0 million and $0.8 million for the six months ended June 30, 2019 and 2018, respectively.

Cunningham Broadcasting Corporation
 
Cunningham owns a portfolio of television stations, including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; WGTU-TV/WGTQ-TV Traverse City/Cadillac, Michigan; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; WPFO-TV Portland, Maine; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah (collectively, the Cunningham Stations). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 8. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of June 30, 2019, we have jointly and severally, unconditionally, and irrevocably guaranteed $48.0 million of Cunningham's debt, of which $9.5 million, net of $0.6 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.
 
The voting stock of Cunningham is owned by an unrelated party. All of the non-voting stock is owned by trusts for the benefit of the children of our controlling shareholders. We consolidate certain subsidiaries of Cunningham with which we have variable interests through various arrangements related to the Cunningham Stations.

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2023 and there are two additional 5-year renewal terms remaining with final expiration on July 1, 2033. We also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement we are obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue or (ii) $5.0 million. The aggregate purchase price of these television stations increases by 6% annually. A portion of the fee is required to be applied to the purchase price to the extent of the 6% increase. The cumulative prepayments made under these purchase agreements were $49.2 million and $47.4 million as of June 30, 2019 and December 31, 2018, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2019 and December 31, 2018, was approximately $53.6 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements, $2.2 million and $2.1 million for the three months ended June 30, 2019 and 2018, respectively, and $4.2 million and $4.7 million for the six months ended June 30, 2019 and 2018, respectively.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between December 2020 and August 2025 and certain stations have renewal provisions for successive eight-year periods.

As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported on our consolidated statements of operations. Our consolidated revenues include $38.5 million and $38.8 million for the three months ended June 30, 2019 and 2018, respectively, and $73.0 million and $76.3 million for the six months ended June 30, 2019 and 2018, respectively, related to the Cunningham Stations.

In April 2016, we entered into an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2022. Under the agreement, Cunningham paid us an initial fee of $0.7 million and pays us $0.2 million annually for master control services plus the cost to maintain and repair the equipment. In August 2016, we entered into an agreement, expiring in October 2021, with Cunningham to provide a news share service with the Johnstown, PA station beginning in October 2016 for an annual fee of $1.0 million.

Atlantic Automotive Corporation
 
We sell advertising time to Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company.  David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, Atlantic Automotive. We received payments for advertising totaling less than $0.1 million for both the three months ended June 30, 2019 and 2018 and both the six months ended June 30, 2019 and 2018.
 
Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent received under these leases was $0.2 million and $0.1 million for the three months ended June 30, 2019 and 2018, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2019 and 2018, respectively.

Other transactions with equity method investees

In 2019, 120 Sports Holding, LLC (120 Sports), an equity method investee, entered into a secured promissory note to borrow $6.25 million from us, maturing on January 11, 2020. The note bears interest at a fixed rate of 12.0% per annum.
v3.19.2
FAIR VALUE MEASUREMENTS
6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS:
 
Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:
 
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table sets forth the face value and fair value of our notes and debentures for the periods presented (in thousands): 
 
As of June 30, 2019
 
As of December 31, 2018
 
Face Value (a)
 
Fair Value
 
Face Value (a)
 
Fair Value
Level 2:
 

 
 

 
 

 
 

6.125% Senior Unsecured Notes due 2022
$
500,000

 
$
508,125

 
$
500,000

 
$
503,750

5.875% Senior Unsecured Notes due 2026
350,000

 
357,770

 
350,000

 
326,375

5.625% Senior Unsecured Notes due 2024
550,000

 
562,375

 
550,000

 
515,625

5.375% Senior Unsecured Notes due 2021
600,000

 
600,378

 
600,000

 
598,500

5.125% Senior Unsecured Notes due 2027
400,000

 
392,000

 
400,000

 
353,000

Term Loan A (b)

 

 
95,892

 
92,057

Term Loan B
1,335,750

 
1,315,714

 
1,342,600

 
1,275,470

Debt of variable interest entities
23,114

 
23,114

 
25,281

 
25,281

Debt of non-media subsidiaries
18,671

 
18,671

 
19,577

 
19,577


 

(a)
Amounts are carried on our consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $29.6 million and $33.0 million as of June 30, 2019 and December 31, 2018, respectively.
(b)
Term Loan A debt was repaid in April 2019. For additional information, see Note 3. Notes Payable and Commercial Bank Financing.
v3.19.2
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
6 Months Ended
Jun. 30, 2019
Condensed Financial Information Disclosure [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:
 
STG, a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the Bank Credit Agreement, the 5.375% Notes, 5.625% Notes, 6.125% Notes, 5.875% Notes, and 5.125% Notes. Our Class A Common Stock and Class B Common Stock as of June 30, 2019, were obligations or securities of SBG and not obligations or securities of STG.  SBG is a guarantor under the Bank Credit Agreement, the 5.375% Notes, 5.625% Notes, 6.125% Notes, 5.875% Notes, and 5.125% Notes. As of June 30, 2019, our consolidated total debt, net of deferred financing costs and debt discounts, of $3,788.0 million included $3,769.4 million related to STG and its subsidiaries of which SBG guaranteed $3,729.5 million.
 
SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries) have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several.  There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.
 
The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows of SBG, STG, KDSM, LLC, and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
 
These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 2019
(in thousands) (unaudited)

 
Sinclair
Broadcast
Group, Inc.
 
Sinclair
Television
Group, Inc.
 
Guarantor
Subsidiaries
and KDSM,
LLC
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Sinclair
Consolidated
Cash and cash equivalents
$

 
$
891,865

 
$
2,995

 
$
34,178

 
$

 
$
929,038

Accounts receivable, net

 

 
538,644

 
51,308

 

 
589,952

Other current assets
4,511

 
12,655

 
91,021

 
34,348

 
(25,895
)
 
116,640

Total current assets
4,511

 
904,520

 
632,660

 
119,834

 
(25,895
)
 
1,635,630

 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
723

 
31,187

 
612,278

 
71,960

 
(16,643
)
 
699,505

 
 
 
 
 
 
 
 
 
 
 
 
Investment in consolidated subsidiaries
1,546,563

 
3,579,483

 

 

 
(5,126,046
)